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Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

April 13, 2004
February 16, 2012
Cash Management

 

Part 6. Cash Handling - Table of Contents


6.3. CHECK COLLECTIONS

A. Receiving Checks

  1. The person opening the mail shall prepare a check log or make copies of the checks as a permanent record of incoming checks. This is not required if receipts are issued. The name of the paying party, the name of the bank or financial institution, the date received, the check number, and the amount of the check shall be recorded in the check log.
  2. All checks shall be made payable to "The University of Texas at Austin."
  3. A restrictive endorsement with The University of Texas at Austin and the departmental name shall be placed on each check immediately upon receipt in accordance with banking regulations, as follows:

    For Deposit Only
    The University of Texas at Austin
    Department/Center name
    Department/Center account number, if applicable

  4. Each check shall have the department abbreviation written or stamped on the front.

Note: Reimbursement checks for bank accounts are deposited by the Office of Accounting.

B. Check Inspection Procedures

Look at the whole check:

  • Has the check been altered? If altered, has it been initialed?
  • Has the check been signed?
  • Does the preprinted name match the signature?
  • Is there a printed address indicating a local street address? P.O. boxes are not permitted.
  • Look for the phone number, Social Security Number, Texas Driver's License or other valid driver's license number.
  • Is the check post-dated (future date) or stale-dated (check date is over the void date on the check—if there is no void date on the check, a check over 180 days old is usually considered to be stale-dated)?
  • Is the payee "The University of Texas at Austin"?
  • The number amount should be the exact amount of bill or sale and agree with the written amount. Watch carefully for missing words in the written amount. The written amount is the amount the bank considers legal and valid.
  • Look at the name and address, as well as the MICR (Magnetic Ink Character Recognition) coding.
  • Check the identification and signature—look at the photo and the face in front of you. Look for signs that the identification is genuine:
    • If you hold a Texas driver's license at an angle, you will see "TEXAS" across the face of the license, including the picture. If you hold the license under a black light, the front side of the license will glow.
    • On a Texas driver's license, there is microprinting around the Texas flag in the upper left hand corner and the Texas State Seal in the upper right hand corner. Fake IDs will show continuous lines instead of microprinting.
    • Look for raised edges around the picture to ensure that a picture has not been placed over the license. A grainy picture may indicate that it was computer-generated.
    • Do not accept an International Student ID as a form of identification. To obtain an International Student ID, a student merely shows a student fee bill.
  • Initial the check and indicate the type of sale or service.
  • Stamp the endorsement on the back of the check.

C. Check Security Features

Look at the check for security features, and follow the directions on the check. For example, if the check states that a watermark will appear if held to the light, please ensure that a watermark does appear; if the check states that if the amount is over a designated amount, then it requires two signatures, please ensure that the check has two signatures. If you do not follow the instructions on the check, you could be held liable for taking the check.

Examples of check security features (reprinted by permission from Abagnale and Associates):

Laid Lines are unevenly spaced parallel lines on the back of the check. They make it difficult to physically cut and paste dollar amounts and payee names without detection.

Pantographs are patented designs that protect a document from being illegally duplicated. When copied or scanned, words such as Void or Copy become visible, making the copy non-negotiable.

Fourdrinier Watermarks are faint designs pressed into the paper while it is being manufactured. When held to the light, these true watermarks are easily visible from either side of the paper for instant authentication. Copies and scanners are incapable of duplicating Fourdrinier watermarks.

Artificial Watermarks are subdued representations of a logo or word printed on the paper. These marks can be viewed while holding the document at a 45 degree angle. Copiers and scanners capture images at 90 degrees and cannot see these marks.

Thermochromic Inks change color or disappear when heated. A document with thermochromic ink can be rubbed for instant authentication.

Dual Image Numbering creates a red halo around the serial number or in the MICR line of a check. The special red ink also bleeds through to the back of the document so it can be verified for authenticity. Color copiers cannot accurately replicate these images back-to-back.

Microprinting is printing so small that it appears as a solid line or pattern to the naked eye. Under magnification, a word or phrase appears. This level of detail cannot be replicated by most copiers or desktop scanners.

High-Resolution Borders are intricately designed borders that are difficult to duplicate. They are ideal for covert security because the design distorts when copied.

Prismatic Printing is a multicolored printed background with gradations that are difficult to accurately reproduce on most color copiers.

Warning Bands are printed messages that call attention to the security features that have been added to protect the document. These bands should advise the recipient to inspect a document before accepting it and may deter criminals from experimenting.

Holograms are multicolored three-dimensional images that appear in a reflective material when viewed at an angle. They are an excellent but expensive defense against counterfeiting in a controlled environment. Holograms are usually not cost-effective on checks, but are valuable in settings such as retail stores where a salesperson or attendant visually reviews each item before acceptance. Admission passes, gift certificates, and identification cards are enhanced by holograms.

Safety Papers combat erasures. For years, paper manufacturers have sold safety papers with multiple layers of colored fibers. When forgers try to erase the paper, it bleeds. However, generic check safety paper is easily obtained by forgers from office supply stores and mail order catalogs. Controlled specialty papers are vastly superior because they are much more difficult to obtain and contain additional safeguards. Although more expensive, specialty papers are an excellent investment.

Multiple Reactive Papers produce a stain or the word "VOID" when activated with ink eradicator class chemicals, making it impossible to chemically alter a document without detection. To enhance security, the word "VOID" can appear in multiple languages, including English, Spanish, and French.

Abagnale and Associates

D. Adding Machine Tapes on Checks

Because the Cashier's Office does not run adding machine tapes on checks received with departmental deposits, departments must follow the following guidelines when running tapes on checks:

  • All adding machine tapes should begin with 0.00 or 0.C (indication that machine was cleared before running tape).
  • In order to insure balancing accuracy, you must run two (2) tapes and include both tapes with your deposit.
  • After TOTAL on tape, allow at least one (1) inch before tearing off tape.
  • Tapes must be at least four (4) inches long. Shorter tapes may jam in the microfilm machine.
  • List only checks on the tape. Do not include cash.
  • Print on tapes should resemble the following: 123.00 or 213.45, NOT 123 or 123. or 123.00000 or 30 x 10.00=300.00.
  • All checks listed must be on one tape and must equal the Check Total that is listed on the deposit, or, if a department has a very large volume of checks (over 250), the checks must be added in batches, with a "total" tape adding all the batches together. This "total" tape must equal the Check Total on the deposit.
  • The following are not permissible:
    • Computer-generated tapes
    • Photocopies of tapes
    • Tapes that are stapled, taped, etc.

Cashier's Office

E. Returned Checks and Electronic Payments

1. Payment Checks and Electronic Payments

When a check or electronic payment, hereinafter referred to as a check, is returned to the University, a $25 service charge is assessed. In some circumstances, a fee for late payment may also be assessed. The payer has ten days from the date of the notice to make full payment by:

  • Cash
  • Cashier's check
  • Credit card
  • Money order

Failure to comply will result in refusal by the University to accept future personal checks. If the returned check was for registration fees or bar clearance, the student's registration will be canceled.

The University will not accept a check from an individual who:

  • previously had a registration canceled because of a returned check
  • wrote a dishonored check to clear a bar
  • was not responsive to requests for payment, after writing a dishonored check
  • habitually writes bad checks, even though restitution is promptly made

Once an individual is restricted from writing a personal check, the bar remains in place for a minimum of one year. After the year has passed, the student may submit an appeal to the Returned Check Section of the Office of Accounting to have the bar lifted.

Student Accounts Receivable

2. Donor Checks

When a donor check received by the University is returned for insufficient funds by the bank, the University charges back the original entry recording the gift to the Development Office. The original check is retained in the Student Accounts Receivable Office for reference. The Office of the Vice President for Development will contact the donor for resolution.

Student Accounts Receivable
Office of the Vice President for Development

3. Redeposit Checks

The University does not redeposit a check returned unpaid for any reason.

4. Departmental Responsibility

If an individual notifies your department that a check will be returned, direct them to the Returned Check Section of Student Accounts Receivable at 512-475-7984. Do not attempt to collect funds for a returned check.

Student Accounts Receivable

 

 

Part 6. Cash Handling - Table of Contents